* Commodities fall as cheaper yuan boosts dollar
* Eight of 10 S&P sectors down, energy stocks weigh
* Industrials and materials stock also hit
* China uncertainty weighs on Apple, GM, Caterpillar
* Indexes down: Dow 1.37 pct, S&P 1.2 pct, Nasdaq 1.42 pct (Updates prices)
By Sweta Singh
Aug 11 (Reuters) - All three major U.S. stock indexes were down more than 1 percent on Tuesday for the first time in over a month as China’s surprise devaluation of the yuan stoked fears about the health of the economy and pressured commodity-related stocks.
The yuan fell to its lowest against the dollar in almost three years following what China’s central bank described as a “one-off depreciation”.
U.S. crude hit contract lows, trading about $1 above its bottom for 2015. Brent, the global benchmark, was heading for its largest decline in a week. The currency move by the world’s top metals consumer pushed copper and aluminum to six-year lows.
Eight of the 10 major S&P sectors were down, with the materials index’s 2.13 percent fall leading the decliners. The loss was index’s biggest in nearly three weeks as
Freeport-McMoRan’s 13.6 percent slump dragged.
The energy index was down 1.6 percent, with Exxon Mobil’s 1.8 percent drop weighing the most.
Concerns around the health of China also weighed on shares of U.S companies exposed to the world’s second-largest economy. General Motors was down nearly 3 percent, while Caterpillar was down 2.9 percent.
At 13:06 a.m. EDT (1706 GMT) the Dow Jones industrial average was down 242 points, or 1.37 percent, at 17,373.17. Of the 30 stock in the index, 28 were in the red, with 18 down more than 1 percent.
The S&P 500 was down 25.24 points, or 1.2 percent, at 2,078.94 and the Nasdaq composite was down 72.50 points, or 1.42 percent, at 5,029.30.
“It’s all about China today. We were doing so well yesterday and then China came and devalued the yuan and we are back in the ship again,” Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.
Wall Street had climbed on Monday, giving the S&P 500 its biggest increase since May, buoyed by gains in commodity-related shares and optimism over Warren Buffett’s deal to buy Precision Castparts.
Nolte believes that markets are trying to align conflicting cues from global economies and the U.S. Federal Reserve, which is widely expected to raise interest rates in September.
“Those two are in opposition to each other. It’s hard for the U.S. to be the island in the storm around the world and that why we are seeing markets jump around.”
Apple fell nearly 3 percent to $116.23 after Jefferies raised concerns about the demand for the iPhone, primarily in China. The stock was the biggest drag on all three indexes.
Google rose 3.6 percent to $687.34 after it said it would overhaul of its operating structure. The stock gave the biggest support to the Nasdaq and the S&P 500.
Terex rose 20 percent at $26.20 after the U.S. cranes and mining equipment maker and Finnish rival Konecranes agreed to an all-share merger.
Declining issues outnumbered advancers on the NYSE by 2,097 to 880. On the Nasdaq, 1,952 issues fell and 790 advanced.
The S&P 500 index showed six new 52-week highs and 17 new lows, while the Nasdaq recorded 34 new highs and 88 new lows. (Reporting by Sweta Singh in Bengaluru; Editing by Savio D‘Souza)